Card fraud – are banks doing the right thing?
With card fraud apparently a bigger problem in Britain than anywhere else in Europe, are you confident your bank would do everything it could to recover your cash?
Picture this: you’re relaxing in a pub with friends. You fight your way to the bar to buy a round. After paying on plastic, you return to your table with the drinks and put your card safely back in your bag, which is hooked around a chair leg.
Now, what if someone standing next to you at the bar has recorded your PIN? The crook has an accomplice, who whips your purse from your bag and heads for the nearest ATM, where they withdraw £200 from your account.
Imagine you only spot the missing card when you get home. You call your bank, which confirms that a withdrawal was made. All OK so far, but what happens next? Now, I’d expect the bank to tell me that it’ll investigate the matter and, ultimately, reimburse me for my losses. And according to the Payment Services Regulations 2009, that’s just what should happen.
Is your PIN the problem?
But is it what actually happens? The Financial Ombudsman Service (FOS) recently said it was concerned that card providers are failing to investigate certain instances of fraud. It said that many people have contacted them complaining that their banks won’t help them, simply because a correct PIN was used. However, under the Directive, use of a correct PIN alone is not enough proof that the cardholder has acted negligently.
As if that wasn’t bad enough, recent research by ACI Worldwide has shown that a third of Brits have fallen foul of card fraud in the past five years. The survey of more than 5,000 consumers across 17 countries found that Britain is now the worst affected country in Europe.
Internet and phone transactions are the biggest cause of criminal loss, which shows that there can be a price to pay for convenience as opportunities abound for tech-savvy miscreants. And this type of card-not-present fraud is on the rise as more of us buy goods this way.
Banks need to step-up
Using trusted websites and downloading anti-virus software can help, but they won’t kill this problem. It’s going to need the banks to play a more of a positive role, educating their customers about online security, and offering swift assistance when a suspected fraud is spotted.
I’ve been lucky as, to date, I’ve not been targeted by a payment card fraudster. But I can’t say I feel all that secure about the whole issue. I doubt we’ll ever eradicate card fraud, but the very least I’d expect is for my bank to take my case seriously if it did happen.
Have you ever been the victim of card fraud? Did your bank investigate what happened and compensate you?
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william
I could have sworn that when we were forced to take chip and pin cards, the banks all stated it was the safest ever, Is that not the case? Were they lying again ( no change there).
I’ve had credit cards for over 20 years, I’ve only been done twice and both times since chip and pin come out. Both times my credit card company rang me at work within a few hours of the fraudulent transaction, I’d like to say minutes but I can’t remember now. The first time asking me if I’d just withdrawn cash from an ATM in Belgium, which was a bit hard as I was sat at my desk. They closed the card and refunded the 200 euros without question, and then asked if they could pass the details to the police. You can read more about that crime here .. http://news.bbc.co.uk/1/hi/england/4980190.stm
The 2nd time the fraud was for 1p, so I had the inconvenience of going without a card for a couple of weeks whilst waiting for a new one to arrive.
I would have to say on both occasions I’d give the card company 10/10 for speed, and resolution, and if anyone remembers me from other which posts you’ll know I don’t give out top marks lightly.
Both times they rang I refused to give any personal details to the “bank” and ended up ringing them back using the number on the back of my card.
Dave D
Yes, they lied.
Chip and PIN is inherently INsecure, or rather, the CHEAP version that the UK banks have implemented is.
Most other countries (who use it) have a far more sophisticated (and far more expensive) Chip & PIN system which is in fact very secure.
The banks also craftily changed the rules when Chip & PIN came in, to make it the customer’s responsibility to prove that they had NOT been negligent, rather than the bank’s responsibility to prove that the customer HAD been negligent. This neatly switched the odds of the bank having to foot the bill for a fraudulent transaction from high to low.
The Government and the Banking Ombudsman did quietly add a little rider to the law: ANY customer who wishs a traditional signature card is entitled by law to be issued with one on request. Some banks (Nat West for example) are willing to comply with this law with minimal fuss. Others (Co-Op for example) argue and become very defensive and offensive when asked for such a card and try to scare customers into thinking that no shop will accept heir card: this is not the case.
Within months of getting a PIN card I was defrauded of several thousand pounds via PayPal. After a lot of fuss I got it back from the bank and demanded a Signature card. Touch wood, no more problems. It may have been co-incidence (after all, PayPal does not enjoy a good reputation over fraud cases) but I’m taking no more chances.
Bob
Banks, here we go again. I remember someone from the BBA on tv talking about the scale of bank/card fraud. Basically he said it was alright if it was below a certain huge amount of money, so many millions.NO NO NO. Give the thieves an inch, and they will try ever harder to go the mile. And thats where we are now.
Sorry but I cannot agree with cardholders being reimbursed after a correct PIN was entered to make a withdrawal. Because some customers are dishonest, and so will make the odd £200 out of it.Of course if there was evidence supporting the claim, the banks must pay.
Paul
I had £540.00 taken from my Santander account two years ago over three days on three separate trasactions from a local cashpoint machine. Santander “investigated” on a Bank Holiday Monday and refused the claim without issuing a refund as per FSA regulations. Their stock answer was chip and PIN was used therefore it could not be fraud. The claim I must have given the PIN number (and the card) to somebody else which is something I denied during their initial questions over the phone. I was basically accused of lying and that was the end of it. I wish I knew then what I know now as the FSA state that the bank must give more evidence other than “chip and Pin was used”. It is no wonder banks are treated with such mistrust
Dave D
By insisting on a Signature card, you legally move the onus back onto the bank in cases of fraud, and they have to prove that you were negligent before they can refuse to pay out.
Annie
Dave D’s comment about signature cards was interesting. I didn’t know we have a choice.
A few years ago one of my cards was stolen in a quite sophisticated manner (the middle card of several in my wallet) and goods worth about £750 were bought in a day. The bank repaid the money to my account but the local police refused to investigate even though I worked out who probably did it. When questioned a sergeant told me that credit card fraud was not on the list of crimes the people of my London Borough (Bexley) wanted them to concentrate on. Social disorder was top of their list and if I wanted to commit a crime to try petrol non payment, because they don’t investigate that either. That was an exceedingly fed up sergeant.
Bob
No wonder the sergeant was fed up, and it will be worse now.Home office have tied the police up with stats and other returns and targets.Now they are to get PCC’s in place of police committees, thus adding a political layer with much power in the hands of one person.
Effectively the constables and sergeants are robots, with time and initiative removed.Driven from above by remote agencies. No good at all.
David
Halifax contacted me by phone.said had I made two transactions for about £ 2000 .i said no and they
Refunded my money strait away. 10/10
Bob
I Spain you have to sign, and show ID e.g. passport or driving licence. Chip and Pin is not accepted. Says it all.
Mikhail
Lie
Dave D
@Mikhail ….what is “lie” – your comment is open to lots of rather different interpretations as it is so vague.
Bob
I should have made clear, Chip and Pin is not accepted for Uk issued cards, but is for Spanish ones.
Mikhail
Lie again))) and your experience based on how many places? Today in Barcelona I’ve used my chip n pin credit card issued by nationwide and nobody asked me to show my id as chip n pin replaced that procedure.
Bob
I can honestly say that is the system in Andalucia.
Gemma
This has pret much just happened to me over the Christmas period I was in a pub etc, I am being told by my bank (Santander) I am not being refunded through negligence they have however told me to go to the police, do any of you think the police will help me?
SadJax
Gemma
Have you got anywhere with the bank? I am having the same problem and am being forced to do my own detective work. Can you tell me which bank you used.
Dave D u seem to know alot on this subject can you offer any help, please?
Dave D
Sadly the situations mentioned by Gemma and SadJax are all too common.
The only “help” I can offer is to suggest that you point out to the banks, if you have not already, that they have a legal responsibility to present convincing evidence that you were negligent. I have no doubt that your banks wil try to insist that if a PIN was used then that’s all the evidence they need, but in the eyes of the law it is actually insufficient. Once you are past that stage I can only recommend involving any or all of:
Your MP,
Your solicitor,
Citizen’s Advice,
The Banking Ombudsman,
Which? Legal or Which? Money (if you are a member they will assist you)
National Newspapers.
Personal experience suggests that if you are with The Co-Op or SMILE banks you will have a massive uphill battle, but I have no doubt whatsoever that they are not alone and that other banks may very well be far worse. If you are with Nat West then I’m sad and surprised as they were, to give them credit where due, very helpful with me.